Lessons Learned: Conviction from Customer Focus

Courtesy of Lenny K Photography

No one disputes the importance of customer focus. As they say, the customer is king.

But we rarely talk about the flexibility that customer focus requires. It’s not enough to build empathy. You need to be willing not just to understand, but to change when your customer demands it. Why? Because your customer doesn’t care one bit about how your business is optimized. Your business model, your processes, and even your product are all malleable in their minds. As the world evolves, your customer expects you to evolve with it. If you don’t, someone else will.

This belief guides how I lead my team. Ten months ago, I took over SAP’s Learning organization. We have more than one thousand exceptional team members building content, delivering training, and working every day to upskill the more than 3 million SAP professionals throughout our ecosystem. Our efforts have always been world-class, but we walked a constant tightrope, balancing the expectations of our learners and the heritage of our operating model. Our team carefully managed the needs of tens of thousands of learners who walked through the doors to our training centers against the known inevitability of a shift to more digitally driven learning. In the process we never stumbled… but we also didn’t move quickly.

The past year posed a new challenge: adjusting our vision for learning as SAP moved quickly to a certain future in the Cloud.

As someone who has been building new software products and services for 20 years, I was excited by this challenge. But not everyone is motivated by change. Skepticism has been commonplace through this journey. So, as our team closes in on one year of transformation, I wanted to share a few observations in case you find yourself in a similar position of guiding change with a strong customer focus.

The most surprising part about our journey was how easy it was to reach consensus on our destination.

As soon as I joined the team, we embarked on a virtual world tour with customers, partners, and colleagues across teams and geographies. Over and over, we heard the same feedback: give us a learning experience that is simple to access, with seamless discoverability of content.

Our learners know best, so with their needs at the forefront we could clearly define our desired end state.

Establishing this north star was key. While it’s common to disagree on what’s upcoming in the near-term, it’s much easier to agree on what the world will look like in the future. A north star ensures everyone is aligned on the inevitable change to come. It allows you to outline expectations for employees and partners and guide them along the journey. And it pushes you to constantly question whether the decisions you’re making will take you in the right direction.

For us, our north star was a simplified learning platform. From there, we could build the path to get us to where we needed to go.

As leaders, we’re naturally biased to overestimate the value of what we already have. At the same time, engineers systematically underestimate how long a complex project will take. Fixing both assumptions is critical to innovation.

In our case, we quickly realized we needed to rethink our pricing model to reach our goals. This wasn’t a novel approach; our peers in the industry have already dropped the pricing of their basic learning content, and customers expect the same from us. It was clear that we needed to change, and fast.

But the speed at which we wanted to move, and the assumed risk to the business, were roadblocks to those who believed that having a base level of free learning would destroy the demand for our premium offerings.

In the end, the risk to the business turned out to be minimal. We saw this as soon as we started to drop the barriers of entry for SAP Learning Hub, our paid digital offering. We released free editions for event attendees and students at partner universities. We launched a new, more affordable partner edition. We unbundled certifications so that learners could buy a la carte. As learners flocked to these new offerings, we didn’t see the expected cannibalization; in fact, last quarter both Learning Hub and certifications grew more rapidly than the year prior, with strong double-digit growth suggesting that the initiatives we introduced actually accelerated the business.

At the same time, we had to move quickly. As Bill Gates advised: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”

With this In mind, the beta version of our new, free learning site, learning.sap.com, was built in just 6 months. We soft-launched with one Learning Journey and a plan to migrate the rest of SAP’s external learning content over the coming few years. This is ambitious, as we have thousands of course modules across existing offerings. But by embracing the change early, and never underestimating the challenge ahead, we set ourselves on a path to success.

The goal of innovation is to increase the pie so that everyone benefits. Consider the growth of GDP. In the time since SAP was founded in 1972, global GDP per capita has grown more than tenfold. Transformation has driven massive growth across industries. When there is growth of this magnitude across the pie, everyone wins — even if one relative slice of the pie shrinks.

As we leapt into our future for SAP learning, we knew that changing our model wouldn’t be a zero-sum game. By offering more learning for free we could grow our total pie so that everyone at SAP and across our ecosystem would reap the benefits. Learning is a rising tide that lifts all ships: customers who are upskilled on SAP have faster deployment time, require less support, and innovate faster.

This means that simplified learning attracts more customers — and lowering the price to do so won’t necessarily mean something else suffers. As we’ve adapted our model, not only have we seen meaningful interest in our newer offerings, we have also seen our overall ecosystem of learners grow.

But to embrace that thinking, we had to walk away from a generation of metrics and strategies that were optimized around duking it out with our ‘old-guard’ competitors. We needed to accept that a decrease in revenue in certain situations didn’t translate into a decrease in significance. Our cultural touchstones were called into question. But if we hadn’t done that — we’d have been stuck optimizing around a delivery model that reflected the past, not the future.

For us, listening to our customer seems to be paying off. But it wouldn’t have been possible without the flexibility to react when they told us we didn’t just need to optimize, we really needed to change. The process is hard, but if you start from a certain future and work backward, if you don’t overestimate what’s at risk, and if you think bigger than the business you’re in today, it’s possible regardless of your space.

Chief Learning Officer @SAP. Faculty @Stanford. Lucky recipient of great friends and brilliant colleagues.